China gaming ban: no new licenses in May points to ‘new normal’ in regulatory hostility
- Silence has followed the agency’s approval for 45 new video-game titles on April 11, leaving the industry in the dark
- China has the world’s biggest mobile-gaming market with an estimated US$49 billion revenue, one investor estimates
Since then, however, the agency stopped issuing new licenses to developers without any explanation, a departure from the previous episode of industry calamity. The agency approved hundreds of titles after December 2018, when it ended a nine-month ban after completing a regulatory regime reshuffle.
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The stop-start pattern is a painful test for China’s gaming industry, which is already grappling with strict content censorship and stagnating growth in the number of players. The absence of new approvals last month is a clear sign that the good old days are over, analysts said.
“We do not expect the rate of approvals to differ from that of 2020 and 2021, nor do we expect a return to pre-2018 approval levels,” said Daniel Ahmad, a senior analyst at video game research firm Niko Partners.
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In the new normal, however, the regulator may issue new licences every two months, or even quarterly, according to Chenyu Cui, a senior analyst at research firm Omedia. “It’s clear that the review process will only get stricter, ” she said.
As NPPA’s approval process is opaque and the regulator didn’t reply to repeated requests for comments, game developers can only wait for their luck and hope to see their applications approved before it’s too late.
For many gaming studios, it means some titles, which have already cost human and financial resources to develop, may never see the light of day.
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“The only thing we can do is to sit here waiting,” a producer at a small game studio in Sichuan province who refused to reveal his name told the Post. The company submitted the application for a licence last July and still did not get the green light. “I’m not even sure if we can survive this month,” he said.
Without licences from the regulator, companies are not allowed to charge gamers fees or to generate revenues. Developers can only run beta tests or free trials for users to play.
Investors are extremely cautious to hand their money out as no one knows what will happen next, said Nana Wu, a Beijing-based freelance game illustrator. “The policy ambiguity is spooking everyone.”
